This is the fifth edition of Kaleidoscope, a monthly retail-focused newsletter from ThoughtWorks. Sign up here.
Who are the ready in retail? What makes a retailer ready for the future?
How can retailers best prepare themselves to compete with category-changers like Amazon? The ripples caused by advances in technology and shifts in what people spend their money on are well publicized in retail. Especially zealous reporters pen terms like ‘retail apocalypse’ and ‘death of retail’. But a host of retailers are bucking the trend and finding growth in challenging times.
Our own Holden Bale and Patti Purcell hosted panelists Megan Allison Wade, Senior Director of eCommerce Operations at Old Navy, Erik Lumer, SVP and Head of Product, Digital at Hudson’s Bay Company, and David Adams, Chief Innovation Officer at Ashford.com, to discuss the topic of Retail Readiness as part of our executive breakfast series. So what sets ‘ready’ retailers apart? While the group agreed there’s not necessarily a cookie cutter approach to success, future-ready retailers behave differently - they’re quicker to market, they bring technology to the core of their business, and they collect and use data more effectively than the rest.
Take a look at Who are the ready in retail? for the key thoughts from the day’s discussion.
eCommerce strategy: Ralph Lauren vs PVH
A video from L2 explains what we can learn from two comparable brands’ approach to eCommerce: Ralph Lauren vs PVH. While Ralph Lauren was much earlier to the ecomm game (online in 2001), PVH (online in 2008) has demonstrated more impressive performance in recent years.
Why? Among other factors, L2 points to PVH’s bifurcated strategy. They invested significantly in brand building on social for both their core Tommy Hilfiger and Calvin Klein brands, as well as beefed up their visibility and direct to consumer capability on Amazon. This has been a particularly good strategy for PVH, a company dependent on high volume sales of lower priced items like Calvin Klein underwear and jeans. In a period where PVH’s sales grew by 20%, Ralph Lauren’s fell 9% due to weaker ties with Amazon and a prolonged focus on discounting. As L2’s Maureen Mullen points out “it’s really hard to grow a business if you’re not selling through a growth channel". The first mover advantage doesn’t always play out, in some scenarios a fast follower strategy might make more sense.
The report also notes PVH’s interesting acquisition strategy. Instead of large, transformative acquisitions PVH pursues smaller bets to help them learn. An example of this is their acquisition of True and Co, a data-driven underwear company based in San Francisco.
Amazon releases ALL the devices, steals Walmart & Trader Joe’s shoppers
A select group of journalists swarmed on Amazon’s Seattle quarters in late September for a surprise, invitation-only event where Amazon unveiled a flurry of new devices. The move cements Amazon’s determination to line your home with Alexa-enabled electronics to usher in a new era of search and shopping. Discovered a pesky hole in your socks this AM? Amazon hopes you’ll request a new pair from your Echo Dot alarm clock. Also among Amazon’s new squad of devices are new Echo speakers, gaming buttons and a talking fish. See them all here.
In the grocery space, a report from Thasos Group reveals lower prices at Amazon’s Whole Foods are hurting Walmart and Trader Joe’s the most. In the week after Amazon’s price cuts, 24% of new Whole Foods visitors were Walmart shoppers, and 10% were Trader Joe’s shoppers.
Top 5: What we’re reading
- Amazon can’t compete with off-price retailers, JPMorgan says. Link
- Ikea has bought TaskRabbit. Link
- Inside GE’s transformation (tiered subscription). Link
- How social media is making luxury fashion available to everyone. Link
- Are hotels the new frontier in experiential retail? Link